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Google vs. Huawei, or the war for technological leadership

| News | Privacy, IT & Digital Business

Isabel Martínez Moriel discusses the war for technological leadership between Google and Huawei in an article for El Confidencial

El Confidencial | Everything points to the latest political and legislative decisions taken by the Trump administration in the U.S.-China trade war as the beginning of an unprecedented legal and geopolitical struggle. The United States has bet everything on rupture, in exchange for forcing a trade agreement that satisfies its interests and, most importantly, maintains its hegemony in international trade in the technological field as well.

Google, following the "executive order" approved by the president, which prohibits American companies from using network and telecommunications equipment that may carry a "national security risk", has given in to pressure and announced that it is resolving the license of its Android operating system to Chinese giant Huawei. This restriction, added to its inclusion in the "List of Entities" published by the Secretary of Commerce, which prevents it from acquiring, without the express authorization of the government, chips essential for the operation of its mobile equipment (such as Intel, Qualcomm, Xilinx or Broadcom), could mean the expulsion of Huawei from the global telecommunications market and stop its development as an operator of the incipient 5G networks that are going to revolutionize all industries.

Although the information seems to indicate that Huawei was developing its own operating system, the impossibility of accessing the updated versions of Android and all the applications of its ecosystem (Gmail, Google Maps, Drive, etc.), place the Chinese operator at a clear disadvantage compared to its competitors and this despite the fact that it ranks as the second largest manufacturer of smartphones by number of terminals sold and third by volume of revenue. The Android universe, Google's operating system, is currently a service that is difficult for consumers to replace, except for Apple's iOS.

It is therefore striking that an operator such as Google, with such recognisable market power, has yielded to political pressure and has not waited for specific government guidelines to interpret or clarify the order. Moreover, if we bear in mind that, if the order is not finally lawful or if the American courts declare it not compatible with federal laws, Google would have to rectify quickly or face once again the scrutiny of the European Commission for possible anti-competitive abusive behaviour.

It seems that Huawei's past, embroiled in industrial espionage disputes (see the T-Mobile case pending before the Seattle courts) and China's own "way of doing" which, even though determined to lead world technological development, preaches, under the mandate of Xi Jinping, an exacerbated interventionism of the economy within his country, tensions the WTO free trade rules and has played its role.

This exacerbated struggle for technological leadership is further explained by the fact that those who lead the 5G networks will be the ones who control the new data economy. Thus, 5G networks will multiply the connectivity capacity of devices and equipment as never before, exponentially increasing the volume of information transmitted and the transmission speed. Thus, they will allow a new era of industrialization based on the Internet of things and on artificial intelligence.

The cybersecurity risks associated with 5G networks have led several states to distrust an operator suspected of "espionage", backed by the United States, but without strong evidence to prove it.

Australia, Japan and New Zealand, countries where geopolitical interests vis-à-vis China are clear, have decided to veto the use of Huawei technology for 5G generation. Canada has not yet taken a firm decision and the EU, champion of an "open market", according to statements by the European Commission on Monday, has no intention of restricting access to Huawei or any operator as long as it complies with applicable regulations.

While it is true that it is essential for the EU to safeguard security, especially of equipment and devices that control strategic sectors such as energy, transport, finance or health, as well as respect for the privacy of personal data, it is also true that the concurrence of a greater number of operators, including Huawei, would allow considerable cost savings and a much faster implementation of 5G networks.

The new NIS Directive on cybersecurity aims at coordination between operators and Member States in the event of any security incident. The legal framework has also been approved to issue safety certifications for products and services recognised throughout the EU, which will facilitate contracting decisions based on objective and verifiable standards.

Just a few days before the European Parliament elections, and after the first year of transposition of the NIS Directive, the European institutions will have to face one of the greatest geopolitical challenges in their history: technological leadership and their position in the digital global economy, reconciling the interests of the different Member States and circumventing the protectionist winds.

You could read the article in El Confidencial.

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